Topic: How To Invest

Q: I have followed your recommendations for years and have built a good portfolio on them. What do you think of the prospects for E.L.F. Beauty? Thank you.

Article Excerpt

A: E.L.F. Beauty Inc., $92.89, symbol ELF on New York (Shares outstanding: 53.3 million; Market cap: $5.1 billion;, sells cosmetics at below department-stores prices and those of specialty shops like Sephora. E.L.F. stands for eyes, lips and face. The company’s products are sold in its own E.L.F. stores, online, and at large retailers such as Walmart (26% of sales), Target (23%), and Ulta Beauty (12%). The company aims to develop its products more quickly than bigger mass-market brands, allowing it to respond rapidly to shifting consumer tastes. E.L.F. started selling online in 2004 but now generates most of its sales from major retail chains. Its products are generally priced between $5 and $11 (versus $30 to $54 or more for prestigious brands). Items include bath and skincare products, mineral-based makeup, professional tools, eyeliners, lipstick, glosses, blushes, bronzers, brushes and mascara. E.L.F.’s revenue rose 45.3%, from $269.9 million in fiscal 2018 to $392.1 million in 2022 (fiscal years end March 31). Excluding one-time items,…